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Why IP owners should worry

CompTIA's Melanie Wyne says a belief that confiscatory government policy must be used to even the score is gaining currency.

perspective Whatever you may think about the recently proposed OpenDocument Format policy switch for Massachusetts' executive agencies, one thing can be agreed on by all sides: It's a big deal. More than two years ago, Massachusetts embarked on an "open standards, open source" policy, ostensibly working to guide its executive agencies toward a more citizen-accessible, cost-effective management of state IT assets. The state finally settled on the mandated use of OASIS' OpenDocument Format, plus Adobe's PDF schema, for its executive agencies' office suites by January 2007. This policy has pitted those in favor of government mandates to meet "larger considerations" against others in the industry who favor a more market-oriented approach.

One editorial labeled Massachusetts' OpenDocument Format plan as the "domino" that will cause other governments and private parties to follow suit, fostering more choice. Others believe that it represents a mandate for a single type of software model, one purposely imposed to limit competition, not strengthen it.

Yes, all of this is big. But there's also something bigger going on. It points to a perfect storm that can't be good for those who depend on intellectual property, or IP, to prosper. As part of the discussion between Massachusetts and software developers who would be affected by the state's mandate, the designer of the OpenDocument Format policy, Eric Kriss, flippantly stated:

"Here we have a true conflict between the notion of intellectual property and the notion of sovereignty, and I'd say that 100 percent of the time in a democracy, sovereignty trumps intellectual property."

This sounds positively pre-Boston Tea Party to me.

Kriss' supporters say the statement has been taken out of context. And they're right. It can't be considered in isolation. It reflects the currently fashionable idea that confiscatory government policy must be used to even the score (whatever that means), thrusting highly demanded, privately risked IP out of the hands of legitimate property owners and into the hands of other, favored actors to further "develop" it.

A recent court decision in the U.S. (i.e., the Supreme Court's eminent domain decision in Kelo); regulatory and legislative actions in the EU (i.e., the EC's stance on interoperability, and failure by the EU Parliament this summer to pass patent legislation); and rampant piracy, not just in the developing world but here on these shores, buttress this supposition.

But the real tipping point seems to be apathy. Thus far, the IP community in America and Europe all seem to have collectively yawned. Such a view can be nothing short of myopic.

Alan Greenspan, the Federal Reserve Board chairman, notes that America's main economic product has become "predominantly conceptual," based in large measure on IP assets. Perhaps as much as 75 percent of publicly traded company value in the U.S. comes from intangible assets, again largely IP-based. The EU parallels much of this experience.

Through privately owned and developed IP, American and European IP companies have given back untold public benefit. Our world-leading, IP-dependent goods and services--our car airbags, drug delivery mechanisms, air traffic control systems, toaster ovens, etc.--make the lives of billions of people better. Strong and enforceable IP rights--e.g., copyright, trademark, patent and trade secrets--have played no small part in this development.

The rest of the world--developed and, importantly, developing--is following suit.

While piracy remains problematic in Brazil, China and India, collectively their IP industries all compete on the world stage, either through their own exports or via the work performed for well-established multinational players. Thus, they depend on IP rights to grow, working to stop piracy, while also boosting their own IP rights regimes.

It may be human nature to wish for the demise of your competitors. Yet to do so through the tool of blunt, confiscatory government policy is a tidal wave that can't be controlled. Regardless of the development model, the IP community in depends on strong IP rights to prosper and grow. Governments must resist the temptation to take this property.

As Kriss points out, it's a strong temptation, even for a "probusiness" appointee. The stakes are high. If the IP community can't disabuse people like Kriss and others of that temptation, our industry, as well as worldwide consumers, had better get used to having their rain parkas on. We're in for a long and furious storm.